How Do Private Lenders Actually Find Deals to Fund?
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Lender · Los Angeles, CA · Member since 2009 · 1k+ posts · 2k+ votes
4moI find this thread a bit strange. Here we have several individuals trying to build a lending business with essentially blank profiles, including one with no first name, and no disclosure on what they want to lend on, where, or any other identifying features that would allow anyone to help them or motivate anyone other than the desperate to contact them.
How do you build a lending business, really any business, when you hold everything so close to the vest?
Finding borrowers has been a common question recently, and the obvious answer has been to attend real estate clubs because that’s where a concentration of potential borrowers hangs out. It works if you lend locally, but not out of state. Marketing yourself to out-of-state borrowers is significantly more challenging, as is protecting yourself from out-of-state scammers.
You can fake ‘till you make it and claim business is great, but a bit of humility, some open disclosure, interaction with the thread, and an occasional thank you or vote will not only get you more focused answers, but are also common courtesy.
33 Replies
- Investor · Member since 2023 · 66 posts · 37 votes4mo
Thank you for posting this. I really appreciate it. I'm a new investor and learning this sort of stuff really does matter. I hope you find some helpful answers from the great people you'll meet here.
- New York, NY · Member since 2014 · 146 posts · 16 votes2moHey chris hit me up on DM love to connect wkth you about private lending. Im looking for someone on my deals.
Quote from @Chris Forbush:
hank you for posting this. I really appreciate it. I'm a new investor and learning this sort of stuff really does matter. I hope you find some helpful answers from the great people you'll meet here.
- 4moErik EstradaBusiness MemberLender · Member since 2022 · 6k+ posts · 1k+ votes
Quote from @Ben H.:
Hey BP community — I'm in a bit of a different position than most threads I see here. I have capital I want to deploy as a direct private lender (my own money, not a fund or institution), and I'm trying to figure out the best ways to get in front of real estate investors who need funding.
I'm not a hard money lender with a big operation — just an individual looking to put my own money to work on solid deals, earn a return, and build relationships with active investors.
For those who've been on either side of this:
- Where do private lenders like me typically find deals / borrowers?
- Do investors seek you out, or do you have to put yourself out there?
- Are there any dedicated platforms or marketplaces that connect private lenders directly with investors looking for funding?
Any insight from experienced investors or other private lenders would be hugely appreciated. Thanks!
Start by posting here on BP or networking with local private money brokers! There are many mortgage expos and conferences to meet potential clients
LuxePrivate Investments LLC 572 Reviews - Member since 2026 · 12 posts · 7 votes4moBeyond posting here and attending meetups, one of the most effective strategies for individual private lenders is to build a reputation within a specific niche — for example, becoming known as the go-to lender for BRRRR deals in a particular metro, or fix-and-flips under a certain price point. When you develop that specialization, active investors naturally refer deals your way because they know you understand their strategy and can move quickly. Local REI meetups and investor groups on BiggerPockets are great starting points, but the real deal flow usually comes once you've done a few loans and your borrowers start talking about you within their networks.
- 4moKenneth GarrettPro MemberInvestor · Florida Panhandle/Illinois · Member since 2016 · 4k+ posts · 3k+ votes
Attend local REIA meetings. There are always investors looking for funding. This is one way you can build relationships with investors. Of course, you can reach out on BP as well. Personally I prefer to meet people face to face and get to know them. I can check out there current projects and check with other people so I can do my due diligence on the investor.
- 4moMike GrudzienPro MemberLender · Eugene, OR · Member since 2019 · 2k+ posts · 1k+ votes
Quote from @Kenneth Garrett:
Attend local REIA meetings. There are always investors looking for funding. This is one way you can build relationships with investors. Of course, you can reach out on BP as well. Personally I prefer to meet people face to face and get to know them. I can check out there current projects and check with other people so I can do my due diligence on the investor.
I agree with Kenneth. Sage advice.
- 4moG. Brian DavisPro MemberInvestor · Hatboro, PA · Member since 2016 · 2k+ posts · 854 votes
A lot of the best private lending relationships still come through networking and reputation. In our co investing club, most deals come from relationships with operators, investors, brokers, and people we’ve either invested with before or spent time vetting carefully. Over time, good borrowers tend to seek out reliable capital sources, especially ones that can move consistently and understand deals.
- Lender · CA · Member since 2023 · 31 posts · 30 votes4mo
@G. Brian Davis would love to know about your co-investing club.
- Member since 2026 · 2 posts · 1 vote4mo
It all boils down to relationships and community. You'd either have to be present in RE shows/meetups with developers or you join a investment platforms which sources opportunities and pools investors on bigger deals.
- 4moSteven LeeBusiness MemberLender · 18021 Norwalk Blvd Suite 209. Artesia, CA 90701 · Member since 2015 · 486 posts · 42 votes
If you're looking to Invest your money to get a return on your money. Be very cautious even meeting people at Real Estate Events. There are people who are getting started and looking for people like you to be their GAP funder. 99% have no assets or guarantee to repay back the debt. You can always build relationship with lenders who come across deals to fund 1st position. Please feel free to ask, If you have any questions.
- Lender · CA · Member since 2023 · 31 posts · 30 votes4mo
@Steven Lee I'm a lender and the way we structure deals is always in first position with a clear exit strategy - deals often have multiple lenders so people with smaller amounts can participate.
- 4moSteven LeeBusiness MemberLender · 18021 Norwalk Blvd Suite 209. Artesia, CA 90701 · Member since 2015 · 486 posts · 42 votes
Quote from @Tammy White:
@Steven Lee I'm a lender and the way we structure deals is always in first position with a clear exit strategy - deals often have multiple lenders so people with smaller amounts can participate.
Tammy,
In California, you can make one commercial or business-purpose loan per 12-month period without holding a license, under what is known as the \(de \ minimis\) exemption. However, if you lend money at an interest rate exceeding 10% (APR), or make more than one loan a year, you must hold a California Finance Lenders (CFL) license or a Department of Real Estate (DRE) broker license
- Lender · CA · Member since 2023 · 31 posts · 30 votes4mo
@Steven Lee Thank you, though I do not lend in California.
- 4moStuart UdisPro MemberAttorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
I never understood the appeal of becoming a private lender who deploys their own capital without the scale required for infrastructure/systems or marketing. The most qualified borrowers both financially and operationally have their pick of lenders to borrow from. They are also the borrowers who are most inclined to source the best real estate. Therefore, the question becomes who are you funding and what does the collateral look like? I believe there's far better places to deploy capital than private lending in that context starting with owning the real estate. I would even say deploying capital into a debt fund or even as equity with a strong operator and strong investment thesis is more passive and will generate better returns without the aggravation.
- 4moBen H.Member since 2024 · 7 posts · 3 votesOP
Quote from @Stuart Udis:
I never understood the appeal of becoming a private lender who deploys their own capital without the scale required for infrastructure/systems or marketing. The most qualified borrowers both financially and operationally have their pick of lenders to borrow from. They are also the borrowers who are most inclined to source the best real estate. Therefore, the question becomes who are you funding and what does the collateral look like? I believe there's far better places to deploy capital than private lending in that context starting with owning the real estate. I would even say deploying capital into a debt fund or even as equity with a strong operator and strong investment thesis is more passive and will generate better returns without the aggravation.
In short, we control and we get to underwrite the deal ourselves. And yes we find great borrowers with great security.
We outperform any debt fund.
- 2moJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Ben H.:
Quote from @Stuart Udis:
I never understood the appeal of becoming a private lender who deploys their own capital without the scale required for infrastructure/systems or marketing. The most qualified borrowers both financially and operationally have their pick of lenders to borrow from. They are also the borrowers who are most inclined to source the best real estate. Therefore, the question becomes who are you funding and what does the collateral look like? I believe there's far better places to deploy capital than private lending in that context starting with owning the real estate. I would even say deploying capital into a debt fund or even as equity with a strong operator and strong investment thesis is more passive and will generate better returns without the aggravation.
In short, we control and we get to underwrite the deal ourselves. And yes we find great borrowers with great security.
We outperform any debt fund.
i maybe missing something you come on BP looking for advice like your a complete newbie to lending then you state you already have great borrowers and beat the pants off of debt funds in the way of returns..
Myself I have been doing private lending ( really HML) in some capacity since the mid 80s.
This business tends to also be highly regional with some areas Awash in money others not so much. So depends on where your collateral is.
Its not rockets science. I gave a presentation in Manhattan beach CA some years back and my first question to the audience ( which is always my first question) Show of hands who in the group is a private lender.. I would say 50 of the 70 folks their raised there hand.. So you have borrowers and lenders in the same room time to network.
However I get your point of view about doing your own deals and for sure if there are no middle men your returns should be higher.. Although I will say it takes scale to really make any money.
- 4moStuart UdisPro MemberAttorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
@NA Hirsch You say you find great borrowers with great colleterial yet you're asking in these forums how to find borrowers which suggests you haven't actually succeeded. Before you say you are going to outperform a debt fund, how much are you investing in upfront cost, the biggest expense being your time networking and securing borrowers. It's similar to the investor who boasts about their 10 cap properties when they are self-managing, mowing the yard, clearing snow and handling the maintenance, leasing and tenant turn overs on their own. More broadly you are not answering the most important question which is why great borrowers with great collateral will choose to borrow from you.
- Member since 2026 · 7 posts · 3 votes4mo
@NA Hirsch,
Networking in any capacity will be your best bet. BP forums, REI meetings, and as crazy as it sounds.. craigslist (although you'll have to do plenty of research there). Good Luck
- Member since 2026 · 12 posts · 2 votes4mo
@Stuart Udis Some people really miss the opportunity of deploying your own capital without scaling. You owing real estate as you mentioned brings way more work and cost. Debt funds might be an option but you will leave a lot of money on the table. You can if you have the money deploy up to 5mill just yourself and looking at great returns double digits. You don't need to scale to make good steady income long term. @Ben H. is getting started and to be honest when it comes down to underwriting many things are considered and even the perfect borrower and property might not work for experienced lenders. Additionally, this is not a 1 to 1 game where there is a lender for every borrower. The market is too big to really be concerned why they want to use my loans. The approach is how I get connected to the borrower I am comfortable lending to. There are way to many borrowers with great profiles right now looking for money and yet no lender has found them and there are many lenders looking for borrowers to deploy capital.
@Ben H. If you are looking to deploy your own capital probably try your network first and see who might be a realtor and that person might have someone who could be needing money. Also, you might want to partner first with someone who has done deals before. Offer a consultation fee for the deal and he/she can walk you through it to get a sense of how a deal is done. Bonus tip: You do want to be very conservative on your first deals and do not freak out when payments stop coming. You just need to work the deal and try to find a solution. Hope this helps.
- 4moStuart UdisPro MemberAttorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
@John Lopez It's not a matter of scaling, it's a matter of operating a business at the necessary scale to benefit from efficiencies. Being a private lender without systems, marketing/recognition is a terribly inefficient business model. As a lender you compete on pricing/terms and service. As a result, there's only so much you can charge before borrowers turn to other options and the lenders who are most expensive are ordinarily getting the borrowers who have nowhere else to turn. That means poor colleterial, weak borrower or both.
So the questions turn to what can you charge between interest, origination and misc. fees? And equally important, how much time and effort goes into finding the borrower and servicing that loan? I would imagine the person without scale to operate efficiently is spending close to if not more than the delta between their collected revenue and what they can get deploying more passively in a debt fund type of arrangement. That's assuming the lenders time is treated as an expense which it should.
When I hear people like NA say we find great borrowers with great security or you saying there are many borrowers with great profiles looking for money and no lender has found them are very rosy takes. Those types of statements really warrant a deeper explanation starting with how/why.
- Member since 2026 · 12 posts · 2 votes4mo
@Stuart Udis I see you still thinking you need a big shop or what you say about scaling and systems and all that. I mentioned you can deploy your capital by simple working with one person. I have one person who does 3 to 4 fix and flips a year. That's 4 250-750k loans per year. You net probably 10% of that. Same person, same contract, same terms, you know the guy, he pays, he knows how much it cost. If he goes to the best lender big bank, months waiting for each loan to close. You do not need marketing or recognition, it is not a big lender, it is just you and your money. I spoke with a lender like two days ago in RI which is good for lending regarding no docs laws, etc and the guy didn't even have a website. Just his personal cellphone and his own money. Of course you can start a lending company and that is a different story but you as an individual, it is a very simple and small operation.
- 4moStuart UdisPro MemberAttorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
@John Lopez You are arguing my points. You are doing up to 4 $750k loans at a time. Very few have $3M of liquidity to deploy as a private lender. For the person who is continually lending out the same much smaller amount and generating a 10% return there are more passive options to generate similar returns and what happens when transactions don't align perfectly..... that money is sitting in an account which diminishes the rate of return those funds are generating. Keeping the funds deployed is not easy. Not saying you can't generate returns or private lending is not a viable business model, but I believe there are greater risks than are understood and the outcomes are not as rosy as many investors would expect. I
- Lender · Los Angeles, CA · Member since 2009 · 1k+ posts · 2k+ votes4mo
I find this thread a bit strange. Here we have several individuals trying to build a lending business with essentially blank profiles, including one with no first name, and no disclosure on what they want to lend on, where, or any other identifying features that would allow anyone to help them or motivate anyone other than the desperate to contact them.
How do you build a lending business, really any business, when you hold everything so close to the vest?
Finding borrowers has been a common question recently, and the obvious answer has been to attend real estate clubs because that’s where a concentration of potential borrowers hangs out. It works if you lend locally, but not out of state. Marketing yourself to out-of-state borrowers is significantly more challenging, as is protecting yourself from out-of-state scammers.
You can fake ‘till you make it and claim business is great, but a bit of humility, some open disclosure, interaction with the thread, and an occasional thank you or vote will not only get you more focused answers, but are also common courtesy.
- Member since 2026 · 12 posts · 2 votes4mo
@Stuart Udis I mean the thread is about how you find borrowers to lend out money and as I mentioned talking to a real estate agent to get started and then work within that circle in your region. If people see ~10% return as something not worth it when you deploy capital having to manage what it entails, 1 to 2 loans at the same time, very easy, then yes you are right put your money with Edwards Jons or Vanguard and get the return you are going to get. Buy T bills if this business model does not work with you or get a CD. This is an option out there. I mean this is just the surface of how I actually deploy capital I do not want to overwhelm people here but I use different financial planning instruments to deploy such capital which no other business using this product will allow you. At the end of the day it is just an option out there.
- 4moJimmy LieuBusiness MemberReal Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
Quote from @Ben H.:
Hey BP community — I'm in a bit of a different position than most threads I see here. I have capital I want to deploy as a direct private lender (my own money, not a fund or institution), and I'm trying to figure out the best ways to get in front of real estate investors who need funding.
I'm not a hard money lender with a big operation — just an individual looking to put my own money to work on solid deals, earn a return, and build relationships with active investors.
For those who've been on either side of this:
- Where do private lenders like me typically find deals / borrowers?
- Do investors seek you out, or do you have to put yourself out there?
- Are there any dedicated platforms or marketplaces that connect private lenders directly with investors looking for funding?
Any insight from experienced investors or other private lenders would be hugely appreciated. Thanks!
Hey, welcome to BP. Honestly, a lot of the best private lending relationships still happen through networking and reputation more than formal platforms. Most active investors usually start by borrowing from people they already know or from referrals inside local meetups, REIA groups, Facebook groups, BP networking, agents, wholesalers, contractors, etc. From what I've seen, the lenders who do best are the ones who spend time building relationships first and understanding how investors underwrite deals, manage risk, and exit projects. Investors definitely seek out lenders once trust is built, but early on you'll probably need to put yourself out there a bit and let people know what kind of deals you're open to funding. I'd also recommend being very clear upfront on your lending criteria, preferred asset types, LTV limits, timelines, and whether you want first position only. One mistake I've seen newer private lenders make is focusing too much on the rate and not enough on the operator. The borrower and their experience matters way more than the property sometimes. There are some online platforms and marketplaces out there, but I'd still be cautious and spend time vetting both the deal and the investor independently before wiring money. A lot of solid borrowers are actually looking for reliable private capital right now because traditional financing has tightened up quite a bit. Happy to connect and answer any questions you have!
Jimmy Lieu, Red 1 Realty4.9120 Reviews - New York, NY · Member since 2014 · 146 posts · 16 votes2moHey one way is by posting here i guess. Im looking for private finacing. Hit me up and discuss?
Quote from @Ben H.:
Hey BP community — I'm in a bit of a different position than most threads I see here. I have capital I want to deploy as a direct private lender (my own money, not a fund or institution), and I'm trying to figure out the best ways to get in front of real estate investors who need funding.
I'm not a hard money lender with a big operation — just an individual looking to put my own money to work on solid deals, earn a return, and build relationships with active investors.
For those who've been on either side of this:
- Where do private lenders like me typically find deals / borrowers?
- Do investors seek you out, or do you have to put yourself out there?
- Are there any dedicated platforms or marketplaces that connect private lenders directly with investors looking for funding?
Any insight from experienced investors or other private lenders would be hugely appreciated. Thanks!
- Real Estate Agent · Lansing, MI · Member since 2020 · 170 posts · 91 votes2mo
I have been on BOTH sides of this (Borrower and PML). I hope these help!
******
- Where do private lenders like me typically find deals / borrowers? - Network, Network, NETWORK. Go to local / regional meetups and follow local / regional real estate investors on social media. This will give you a great idea of who is actually doing what and you will start to build trust (both ways) with people looking for funds when the time comes.
- Do investors seek you out, or do you have to put yourself out there? - Both. Once I made it known that I had money to lend, I had a handful of people reaching out (some I knew, some I did not). Be weary as you will ALWAYS get a handful of wrong people asking for money. That's just the nature of the beast. Also, there have been times when I've had more funds become available and I personally called / texted a couple of local investors I knew asking if they had any projects coming up that they needed funds for. You'd be amazed at how well this timing works sometimes for both parties.
- Are there any dedicated platforms or marketplaces that connect private lenders directly with investors looking for funding? - I'm sure there are (I have not used them before), but I will double and triple down on LOCAL REI meetups and actually meeting with someone before ever chatting with them about money.
****Suggestions I tell anyone looking to lend money.
* Be very easy to work with (Then investors will regularly come back to you for funds. You are in competition with other lenders.)
* Don't get greedy on your rates / fees (Again, you're in competition with other lenders).
* Always ask for referrals (someone who has actually lended them funds before).
* Make sure you know the person and somewhat trust them (it's hard to fully trust when you've never done a deal before).Best of luck!
- Contractor · Memphis TN · Member since 2026 · 12 posts · 9 votes2mo
One thing that makes me cautious as a borrower when trying to work with an individual private lender is being asked to send upfront money for origination fees, commitment fees, or other costs before a legitimate closing process is in place.
From my perspective, if I'm wiring funds directly to someone I've only met online, there's always the risk that the money disappears and the loan never closes. Are these deals always done by closing through a reputable title company or closing attorney? For those of you who lend your own capital, how do you typically structure your closings? Do you collect any fees only through the closing attorney/title company, or are there situations where upfront payments are standard? I'm interested in learning what experienced private lenders consider best practice.
- Lender · Los Angeles, CA · Member since 2009 · 1k+ posts · 2k+ votes2mo
Quote from @Dejuan Harvey:
One thing that makes me cautious as a borrower when trying to work with an individual private lender is being asked to send upfront money for origination fees, commitment fees, or other costs before a legitimate closing process is in place.
From my perspective, if I'm wiring funds directly to someone I've only met online, there's always the risk that the money disappears and the loan never closes. Are these deals always done by closing through a reputable title company or closing attorney? For those of you who lend your own capital, how do you typically structure your closings? Do you collect any fees only through the closing attorney/title company, or are there situations where upfront payments are standard? I'm interested in learning what experienced private lenders consider best practice.
First, why in the world are you doing business with online strangers, Dejuan? I can't think of a more unreliable and dangerous way to borrow money. You appear to be in Memphis. Are there no real estate clubs in your city where you can network and meet private lenders? The safest and most reliable way to borrow money is to develop face-to-face relationships with potential lenders. Facebook, Craigslist, Instagram, and the like are cesspools of scammers. It’s simply too easy to find money in person.
Second, why are you wiring money to these strangers? Have you ever borrowed money for a real estate transaction before? The only money any lender should request up front might be for an appraisal and perhaps a credit check. The appraisal fee should be paid directly to the appraiser, and a credit check should cost no more than about $50. That should be your maximum financial exposure before closing.
Further, depending on local custom, your deposit and nominal fees should be sent to the title company or perhaps the closing attorney, never to the lender and never to an escrow company.
Unless you’re writing about large commercial transactions, this business has become too competitive to tolerate unnecessary junk fees such as commitment fees, application fees, due diligence fees, and other such nonsense. Legitimate lenders don’t ask for these anymore. It should be a red flag if they do.
- Contractor · Memphis TN · Member since 2026 · 12 posts · 9 votes2mo
Thanks for the response, Jeff. Just to clarify, I've never actually done business with an online stranger, and I've never wired anyone a dollar. The conversations I mentioned have come from networking and talking with people about deals I've came across as I'm learning this side of the business.
I've also never borrowed money for a real estate transaction before. My first investment property I bought with cash. My background has been on the contractor side of real estate, doing renovations for investors, including out-of-town investors. Now I'm making the transition to becoming an investor myself, so I'm trying to understand how experienced private lenders structure their deals.
I understand that lending businesses typically have borrowers pay for things, with the closing handled through a reputable title company or closing attorney. My question was really about the specific situation of an individual lending money from their personal bank account. I was curious how experienced private lenders who lend this way have borrowers pay for these things before closing, or if they also handle everything through the title company or closing attorney.
As for networking in person, I'm still working on building those relationships. I honestly don't know many local places in Memphis where private lenders meet, but I'm actively looking because I agree that face-to-face relationships are the best way to do business. But opening up to out of state could be a deal to consider if everything is legitimate. Appreciate the advice
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